The Treasury has said it will not bow to pressure from the industry to set up an independent commission to oversee future pensions policy.
Since last October, AJ Bell chief executive Andy Bell has written to several members of the Government, including the Chancellor and the pensions minister, calling for a non-partisan group like the Turner Commission, which studied the impact of auto-enrolment, to review the existing pension tax system and set a more long-term approach to policy.
The group would include figures from across different industries with the goal of setting key pension tax relief rules that would be frozen for ten years, echoing calls by others such as The Scottish National Party for a new independent commission to investigate actions taken by savers since the launch of the pension freedoms.
In a response to Bell’s letter, Treasury financial secretary Jane Ellison writes: “As you are aware, an extensive consultation was conducted last year which considered changes to the pensions tax framework. This concluded that now is not the right time to undertake significant reform.”
“Given this, the Government does not think it is necessary to convene an independent pensions commission at this time.”
However, the response, dated 2 March, pre-dates the Budget and Chancellor Philip Hammond’s subsequent U-turn on increasing National Insurance Contributions for the self-employed.
Treasury sources have since suggested that Chancellor Phillip Hammond is eyeing cuts in pension tax relief to fill the £2bn funding shortage left by his U-turn
Bell says: “While the Chancellor has not been able to resist tinkering completely through the unnecessary cut to the Money Purchase Annual Allowance, hopefully the Treasury’s response to us gives people some comfort it will not subject pensions to more unnecessary uncertainty, at least during this Parliament. If the Government does turn its attention back to higher rate pensions tax relief, it will seriously undermine its credibility.”